Fixed Income Analysis /

MSU ENERGY: Debut issue: senior secured US$550mn, 7yr bond

    Rafael Elias
    Rafael Elias

    Director, Latin America Credit

    Tellimer Research
    24 January 2018
    Published byTellimer Research
    Argentina’s MSU Energy, a consortium of companies (the co-issuers) comprising Río Energy, S.A., UGEN, S.A., and UENSA, S.A., is coming to the market with a US$550mn, senior secured seven-year (non-call four) debut bond in the next few days.

    We believe MSU could price 75bp to 100bp tight to Stoneway Capital’s 2027s (currently yielding c7.86%) due to the seniority of MSU bonds, their shorter duration and the fact that two and one-third of its three-plant capacity is already operating and generating revenue. Thus, we expect the new MSU bonds to be priced to yield between 6.75% and 7.00%.